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What's Driving the Business Case for Carbon Management?

Innovation, costs, and regulation now drive leading firms to increasingly embrace carbon management and sustainability, but within the next few years, companies will move in greater numbers from a tactical to strategic approach as factors such as emissions and resource scarcity take on greater importance in C-suite decisionmaking. Read More

(Updated on July 24, 2024)

Innovation, costs, and regulation now drive leading firms to increasingly embrace carbon management and sustainability.

But within the next few years, companies will move in greater numbers from a tactical to strategic approach as factors such as emissions and resource scarcity take on greater importance in C-suite decision-making, according to David Metcalfe, director of U.K. research firm Verdantix.

Metcalfe joined Michael Lehane, director of product management at IHS Environment, and Joel Makower, executive editor of GreenBiz.com for an hour-long webcast Thursday exploring “The Business Case for Carbon Management.” The free webcast, which will be available at 10 a.m. PST today, comes as the term carbon footprint is taking on greater meaning and urgency for both the business community and the public. At the same time, many companies have caught a glimpse into how the reduction of environmental impacts can be used as a source for innovation and competitive advantage.

“In the past five years, an increasing number of companies have launched projects designed to measure their enterprise carbon footprint,” Makower said at the beginning of the webcast. “But who owns that data?”

Companies face the challenge of filling the gap between the executive team, which controls the budget, and the functional teams, which have the skills to those who can carry out the initiatives. The gap between functional and executive levels

This is where the chief sustainability officer (CSO) can come in to play a pivotal role in moving corporate climate agendas forward. “We see it as critical,” Metcalfe said, pointing to Nixon Peabody and BA Systems as companies employing CSOs.

He also noted Dow Chemical‘s approach in combining the CSO role with that of the Chief Information Officer, leading to the establishment of a holistic view of sustainability and the incorporation of this type of thinking into Dow’s corporate strategy and value systems.

Metcalfe scribed the period between now and 2012 as a period of uncertainty for companies, characterized by short-term cost pressures and climate change regulations fragmented along geographic lines. The executive view of sustainability is generally low, Metcalfe said.

The uncertainty won’t last, despite recent controversies around climate science, which Metcalfe expects to “blow over.”

“When we look back in 12 months time, this will be seen as a blip in the market,” he said.

And although it would seem that the outcome of climate change conference in Copenhagen, which many view with disappointment, would add to the uncertainty, it has had an unexpected effect on some developing countries.

“The impact on India and China is for them to feel like they’re part of a global program for the first time,” Metcalfe said.

Between 2013 and 2020, companies will shift toward competitive positioning where a range of factors will come into play and executives perceive sustainability and carbon management to be a strategic investment.

“This is not about climate science, this is not about regulation,” Metcalfe said. “This is about competitive advantage.”

He noted that the speed with which companies move toward a competitive approach to sustainability largely depends at this point on carbon. “The utility sector is under the most pressure now,” Metcalfe said, pointing to National Grid, the London-based power company that instituted GHG forecasting and budgeting across its enterprise last April.

But with the move toward automated accounting of key performance metrics comes the challenge of harnessing the influx of incoming data, said Lehane, who frequently encounters companies as they “struggle to take the data and do something with it.”

Companies want to take advantage of a variety of capabilities in their greenhouse gas management efforts that go beyond simple baselines, Lehane said, such as reporting, offsets and verification. The data must withstand the scrutiny that would be applied to an audit.

“You need to ask yourself,” Lehane said, “‘Are your numbers ready for that level of detail?'”

Image CC licensed by Flickr bilderheld.
 

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